Department of Education Distributes “Dear Colleague” Letter Discussing AI And Use of Federal Funds by Schools
In a “Dear Colleague” letter dated July 22, 2025, the U.S. Department of Education (“DOE”) issued guidance on the use of federal grant funds to improve education outcomes using artificial intelligence (“AI”). The letter articulates the DOE’s commitment to educational excellence, innovation, and opportunity for every learner and encourages federal grantees to explore how AI can enhance teaching and learning, expand access, and support teachers without replacing the critical role played by educators in the American school system.
The letter affirms that AI may be used so long as the uses are allowable under existing federal education programs and align with applicable statutory and regulatory requirements. The first applicable guidance addresses the allowable uses of funds and grants for instructional materials. These uses include: (1) development or procurement of AI-powered instructional tools that adapt to learner needs in real time; (2) expansion of access to high-quality, personalized learning materials across all subjects, grade levels, and learning environments; and (3) training of educators, providers, and families to use AI tools effectively and responsibly.
The second set of guidelines authorize the use of funds and grants for high-impact tutoring options, such as: (1) intelligent tutoring systems that provide individualized academic support with real-time assessment; (2) hybrid models where human tutors are complemented by AI-based learning platforms; and (3) diagnostic and scheduling tools that use AI to match learners with tutoring services based on need.
The final category outlines authorized uses of AI for college and/or career pathway exploration, advising, and navigation, including: (1) platforms that leverage AI to help students identify career interests, explore pathways, and make informed choices; (2) virtual advising systems that guide students through course planning, financial aid, and transitions to postsecondary education or careers; and (3) predictive models that support educators in identifying students in need of additional advising or support services.
The letter affirms “principles for responsible use” involving AI-related educational initiatives. Those initiatives must be educator-led, ethical, accessible, transparent, explainable, and data-protective; should support teachers, providers, tutors, advisors, and education leaders and that educators should help students navigate AI to evaluate validity and understand the appropriate use of AI; should ensure that all AI tools or systems utilized in the education system are accessible for those who require digital accessibility accommodations; and should be transparent for stakeholders, especially parents, so that they understand how the systems function and can participate meaningfully in decisions about the adoption/development of new technologies in the classroom. Finally, the letter reminds school districts that all AI systems must comply with federal privacy laws including the Family Educational Rights and Privacy Act (FERPA).
In the context of federal funding and grants, the DOE letter outlines how school districts may utilize those funds and grants regarding AI. Other than authorizing recipients for training families to “use AI tools effectively and responsibly”, it does not explicitly address how school districts may respond to incidents of student conduct involving their use of AI to generate classroom work. That is the subject of ongoing development by school districts. Last Fall, the United States District Court in Massachusetts rejected a claim for an injunction based on allegations that a school district had violated the Fourteenth Amendment’s Due Process Clause when it penalized a student for cheating by submitting AI-generated material as his own work. Harris v. Adams, 757 F. Supp. 3d 111 (D. Mass. 2024).
We are pleased to advise Massachusetts school districts on issues related to the application of federal and state funding and grants, as well as on the proper role of AI in schools.
This update is provided for informational purposes only and should not be considered legal advice.